Correlation Between GlaxoSmithKline PLC and Voya Asia
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Voya Asia at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GlaxoSmithKline PLC and Voya Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlaxoSmithKline PLC ADR and Voya Asia Pacific, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Voya Asia and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in GlaxoSmithKline PLC with a short position of Voya Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Voya Asia.
Diversification Opportunities for GlaxoSmithKline PLC and Voya Asia
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between GlaxoSmithKline and Voya is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Voya Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Asia Pacific and GlaxoSmithKline PLC is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on GlaxoSmithKline PLC ADR are associated (or correlated) with Voya Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Asia Pacific has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Voya Asia go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Voya Asia
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Voya Asia. In addition to that, GlaxoSmithKline PLC is 1.51 times more volatile than Voya Asia Pacific. It trades about -0.31 of its total potential returns per unit of risk. Voya Asia Pacific is currently generating about -0.17 per unit of volatility. If you would invest 646.00 in Voya Asia Pacific on August 29, 2024 and sell it today you would lose (22.00) from holding Voya Asia Pacific or give up 3.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Voya Asia Pacific
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Voya Asia Pacific |
GlaxoSmithKline PLC and Voya Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Voya Asia
The main advantage of trading using opposite GlaxoSmithKline PLC and Voya Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Voya Asia can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Voya Asia will offset losses from the drop in Voya Asia's long position.| GlaxoSmithKline PLC vs. Novartis AG ADR | GlaxoSmithKline PLC vs. AstraZeneca PLC ADR | GlaxoSmithKline PLC vs. Roche Holding Ltd | GlaxoSmithKline PLC vs. Bristol Myers Squibb |
| Voya Asia vs. Eaton Vance Risk | Voya Asia vs. Blackrock Muniholdings Closed | Voya Asia vs. DTF Tax Free | Voya Asia vs. Eaton Vance Floating |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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